Ex-Olympus executives charged in fraud scandal

Three former employees charged by Tokyo District Prosecutors' Office, and may face up to 10 years in prison or a US$125,000 fine, report says.
Written by Jamie Yap, Contributor

Tokyo prosecutors have charged three ex-Olympus executives in connection to the US$1.7 billion accounting fraud uncovered last October.

Reuters reported Wednesday that Olympus ex-chairman Tsuyoshi Kikukawa, former executive vice president Hisashi Mori, former auditor Hideo Yamada have been charged with inflating the company's net worth in financial statements for the fiscal years ended March 2007 and 2008, in breach of the Financial Instruments and Exchange Law. Former bankers Akio Nakagawa, Nobumasa Yokoo and Taku Hada were also charged, the report said.

The six were arrested last month on allegations of falsifying financial statements.

The accounting scandal emerged in October last year when former CEO Michael Woodford publicly questioned the company's accounting irregularities, just days after he was fired by the board. Olympus later admitted to have covered up massive investment losses since the 1990s, in one of Japan's largest corporate scandals, and saw Kikukawa, Mori and Yamada quit last November.

In an official statement Wednesday, Olympus said it "takes the prosecution by the Tokyo District Prosecutors' Office with utmost seriousness and will continue to make every endeavor to enhance the corporate governance systems".

Prosecutors on Wednesday also rearrested Kikukawa, Mori, Yamada and Nakagawa on suspicion of submitting false financial statements for the fiscal years ended in March 2009, 2010 and 2011, Reuters said.

Under the charges, Olympus executives could face up to 10 years in prison, or a fine of up to 10 million yen (US$125,000), it added. The company could be fined US$1.2 million for false accounting.

Meanwhile Olympus itself is reportedly suing former and current executives for mismanagement and negligence in not spotting the cover up.

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